5 Stocks Approaching Greatness

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Some companies are obviously great investments -- in hindsight. Yet for every stock out there screaming "buy me," others simply give us a nudge and a nod. How can we tell tomorrow's obviously great investments from the thousands of pretenders?

The stars' walk of fame
The data shows that stocks achieving five-star ratings on Motley Fool CAPS outperformed the market by 12 percentage points during the first 20 months of CAPS, and newly minted five-star stocks represent your best opportunity to capture those returns. So let's sift through the proprietary ratings system and find those stocks heading toward stardom. Here are a handful of four-star companies that might be approaching greatness.

• Campbell Soup (NYSE: CPB)
• Dollar Financial (Nasdaq: DLLR)
• Neenah Paper (NYSE: NP)
• Western Refining (NYSE: WNR)
• Yanzhou Coal Mining (NYSE: YZC)

Some of these names might surprise you. You probably grew up eating Campbell Soup, for example. Almost great? Even familiar names can still offer some of the best opportunities. Perhaps we've just forgotten the potential they still hold. However, the 125,000-plus CAPS members chose these companies as less obvious sources for tomorrow's great buys, so let's see why they might merit your attention.

Almost famous
Even though China has large coal deposits of its own, they are largely of a lower grade, so miners like Yanzhou Coal -- the fourth-largest fuel producer in the country -- are looking to places like Australia to expand. Companies Down Under have become a hot commodity in their own right, with Xstrata and ArcelorMittal (NYSE: MT) having also pursued acquisitions there.

CAPS member animekenji thinks the need for cheap sources of energy will keep coal dominant in China, a situation that will allow miners like Yanzhou to flourish:

Coal consumption in China and India is growing and they will be building more coal fired power plants because they are much cheaper to build and operate than greener alternatives. Any coal producing company located in or selling to these countries is going to be printing money.

Oil refiners like Western Refining and Valero (NYSE: VLO) are part of a sector that has been among the top performers lately -- up at least 20% over the past month at one point. Though the falling price of oil has helped consumers, lower prices have caused refiners to cut production. Valero, for instance, has reduced production at 10 refineries.

CAPS member Pablocruz says he has no crystal ball but thinks the "smart money" is jumping in at this point.

Smart money is jumping on for the ride up...are you? Well to tell the truth, I don't have a crystal ball, I can say for sure that I'm buying low here. Buying low is a good thing, as in the past I've done the reverse.

A great opportunity for you
These four-star investments might be on their way to five-star status, so it pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page.

Sign up today for the completely free service and let's hear what you have to say about the great and almost-great companies that interest you. 

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